Osborne offers big cities a deal on self-rule

George Osborne will on Thursday announce a law offering the big cities of England unprecedented new powers, but only if they follow Greater Manchester in adopting an elected metro-mayor.

Mr Osborne will claim that "the old model of trying to run everything in our country from the centre is broken" and wants to transfer tax and spending powers from Westminster to a new wave of big city mayors.

The Cities Devolution bill is being presented as an English counterweight to the promise by David Cameron of the transfer of new fiscal powers to the Scottish parliament.

But Mr Osborne will make it clear in a speech in Manchester that he will only give cities power over issues like transport, housing, skills and healthcare if they embrace his "radical new model of city government".

He will say: "It's right people have a single point of accountability: someone they elect, who takes the decision and carries the can. I will not impose this model on anyone but nor will I settle for less. London has a mayor."

Mr Osborne sees Greater Manchester as "the blueprint" for this new model. The city and its surrounding towns have opted for an elected metro-mayor and are at the heart of the chancellor's "northern powerhouse" plan.

The chancellor has offered Manchester £1bn of spending power over transport, skills and other areas as well as joint control of £6bn health and social care spending with the NHS.

But other cities like Leeds, Liverpool, Sheffield and Birmingham have so far resisted the idea of elected mayors covering their city region. Mr Osborne's offer is intended as a big inducement to change their minds.

Many cities have formed so-called combined authorities along the lines of Greater Manchester, which pool decision making across city regions such as West Yorkshire and the former Merseyside.

Combined authorities centred on Leeds and Sheffield have been granted some additional powers by Mr Osborne, but not on the scale of those offered to Manchester.

There remains fierce debate about how far devolution should go and which cities should be eligible.

The Core Cities grouping - representing England's eight largest city economies outside London as well as Glasgow and Cardiff - on Thursday launch a "devolution declaration" for further and faster reform.

The Key Cities body, comprising 26 smaller cities, is arguing that they should have local control over taxes ranging from VAT to stamp duty and council tax.

Meanwhile, Conservative-led authorities in the south and Midlands want to be included in the process.

"They are saying; why are you giving all this stuff to Labour councils in the north?" said Jonathan Carr-West, chief executive of the Local Government information Unit, a local democracy think-tank.

In 2012 the Conservatives offered referendums on single-city mayors in 12 places but only Liverpool (the city, but not the Merseyside city region) and Bristol adopted the model.

Last week's local elections showed how voters' choice of elected mayors can be radically different from their choice of MPs and councillors. The six elected mayors comprised two independents, one Liberal Democrat, one Labour and one Conservative.

Manchester's interim mayor will be chosen by councillors on May 29. Labour's Lord Peter Smith, Wigan council leader, and Tony Lloyd, the police commissioner, are the only candidates. A citywide election will be held in 2017.

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